Salem wants to buy Diversified's Residential Properties Management business for $950,000, with $700,000 in cash. That amount would pay off a debt to an undisclosed bank and improve Diversified's cash flow position.
"This is an extremely critical matter to the company," Benton says in the statement. "The bank, which is owed $625,000, is tying up about $3.8 million of our receivables as collateral." The deal with Salem would free up the receivables for Diversified.
The remaining $250,000 of the $950,000 offer would cancel a note Diversified owes Benton, according the statement.
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